Hopper Claims JetBlue Will Drive Down Airfares 12% When They Begin Flying to London. That’s Absurd.

This week JetBlue announced plans to fly New York JFK and Boston to London some time in the future and excitement erupted well out of proportion to what we actually learned from the news.

Associated Press travel reporter David Koenig noted this claim on Thursday from airfare predictor Hopper,

That seemed bizarre to me. We do not yet know,

  • When JetBlue will start service
  • How many times a day they’ll fly
  • How many seats they’ll offer on each aircraft
  • Even which airport (out of 5) they’re going to fly to in London

And the notion that JetBlue’s service is going to be the key determinant of future fares seems odd considering we’re talking about as much as three years from now.

  • What will the economy be like?
  • What will Brexit look like, and how will that impact travel to and from London?
  • How expensive will fuel be?
  • Will Norwegian still be flying?

Surely Hopper had a sophisticated model that answered these questions in order to make such a bold claim, after all they’re an airfare data company, right?

It turns out that the claim is based on what happened to fares when JetBlue started flying New York – Trinidad and Tobago.

The study was carried out by travel comparison site Hopper, which noted that historically, when JetBlue enters an international market, fares plummet by on average 12 per cent

Though it can be even more.

Hopper pointed out that when the carrier launched flights from Fort Lauderdale and New York’s JFK to Trinidad and Tobago, it spurred savings on all airlines of up to 26 per cent.

JetBlue has extensive service in the Caribbean and operates as far south as Ecuador. They’ve never flown transatlantic, and their international service hasn’t started along such already-competitive routes as New York and Boston – London. There are currently 27 peak daily departures between New York and London airports alone. A handful of additional narrowbody flights seem unlikely to materially affect fares overall, especially when low cost transatlantic carrier Norwegian already flies New York – London.

Where JetBlue could make a difference is in business class fares — for customers with flexibility to travel at times JetBlue is offering service. There may be some price matching from other airlines, though likely only on a limited basis because of the limited capacity which will presumably be offered by JetBlue at low fares.

I do not need Hopper’s trove of data to say, unequivocably, that JetBlue on its own will not move the needle on transatlantic London fares 12% — because they’ve historically done so on thinner Caribbean routes.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I don’t see JetBlue losing $ gUaP $ to any airline competitors. Whoever said that in my personal opinion is flapping their gums just to be yapping their yap like an aging New Yorka! L 😛 L

  2. JetBlue fares are rarely cheaper then the competition.

    I do a bunch of paid trips to JetBlue cities each year, and they are always equal or slightly higher then my other options. Which often includes United. For a quick domestic trips? I almost always opt for United, since I get free bags, priority boarding, and earn miles which I use for Business class international trips. However for a LONG trip in coach, like when I went to the west coast – I went with JetBlue for the comfort factor.

    I’ve never flown coach overseas, but were I forced to – I’d pay slightly more for the JetBlue product. This is especially true with United removing their awards charts. Earning miles won’t be as high in my thought process.

  3. @ Gary — I suspect that once they DO start service, fares will drop MORE than 12%. Then they will be crushed by the competition in a fare war. The real question is how long until they pull out on London?

  4. Hypothetically, fares could drop 12%, but it would all be weighted by the reduced cost in the premium cabin. B6 tends to be on par with costs in coach, but is willing to sell their premium cabins at a significantly lower cost than competitors. If they are selling Mint class for $2000 when the average cost is close to $3000 in premium class, the overall ticket costs could be reduced. Still it seems premature to be predicting these things when B6 has a long way to go before getting to London.

  5. Of course it depends upon how much capacity they add, but I think this actually is a very conservative estimate if they ramp it up. I remember well when $1200 o/w fares between NYC-LAX were common if you didn’t have an advance purchase or a Saturday night stay. Since Jet Blue arrived, those days are long gone — and the reduction is surely more than 12%. Since the arrival of Mint I think that Business fares have taken a nice hit as well . . . I flew Mint recently for about half of what it used to cost me to fly economy.

    Now, given that AA and (to a lesser extent) DL have put substantially all of their eggs in the LHR basket, what will the arrival of JetBlue to London mean for their operations? Seems mighty stupid to me.

  6. It is unlikely that prediction will happen even with constant conditions. It got attention and accomplished its primary purpose.

  7. Whenever I see Jetblue as an option they dont seem to be actually cheaper than anyone. Same as with Southwest. Admitted, you may get a bag for free if you actually need that, but that´s very much about it.

  8. Shocked. Someone is making a click-bait title off of questionable data.

    I care less if 12% drop happens. Say 5% drop and Jetblue offering 33-34 and 18 in econ is enough.

  9. While that may be true for smaller markets with low total seats per day going into them, the seats JetBlue will be bringing into London will be trivial compared to BA/AA and the other majors who could quickly drive the JetBlue flights into unprofitability. JetBlue’s arrival into MSP has had little impact price wise.

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